Kentucky lab and clinic settle big false claims case

A Kentucky chain of addiction clinics, a testing lab and two doctors will pay $15.75 million to settle false claims allegations, the Justice Department says.

SelfRefind, the chain of clinics, and PremierTox LLC, the clinical lab that performs urine testing, agreed to the settlement along with Drs. Bryan Wood and Robin Peavler, according to the Justice Department. The $15.75 million payment will resolve allegations that they submitted claims to Medicare and Kentucky's Medicaid program for tests that were medically unnecessary, more expensive than those performed or billed in violation of law, the department said.

SelfRefind operates 12 clinics in Kentucky and four in Ohio, according to its website.

The department said that in December 2010, Wood and Peavler each purchased a 20 percent stake in PremierTox. The government alleged that the doctors' SelfRefind clinics then began referring comprehensive urine drug screening tests to PremierTox that were unnecessary and more expensive than alternative tests.

"Federal health care programs are essential to many of our citizens," said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. "We will not tolerate efforts by misguided providers to unfairly enrich themselves at the expense of these programs and the taxpaying public."

The Justice Department noted the case settled allegations and that "there has been no determination of liability."